Posts Tagged ‘Pension Protection Fund’

Richard Smith

Yes, it’s that time of year again. The start of a new quarter and, once again, the pace of change in the pensions world continues unabated. Your team at Spence has pored over the various legislative changes, reviewed in detail the consultations and kept their fingers on the pulse of current issues in order to bring you a condensed summary of the highlights from the first three months of 2017.

As such, you can see at a glance the key issues you need to be aware of from the last quarter, and we’ve even put together a handy summary of what topics and dates to keep a look out for in the next quarter.

Topics covered in this quarter’s update include:

  • News from the PPF;
  • Consultation on the future of defined benefit pensions;
  • Highlights from the investment markets;
  • The ever-increasing value of scheme liabilities;
  • with many other highlights besides.

So what are you waiting for?… Click here to download your copy of the Spence Quarterly Update!

Helen Toner

The Pension Protection Fund (“PPF”) published the final rules for the 2016/17 PPF Levy on 17 December 2015. As expected, the rules for 2016/17 are substantially the same as 2015/16 reflecting the PPF’s desire to maintain stability of methodology.

Following feedback, the PPF have made some slight technical changes relating to the 2016/17 levy: Read more »

Alan Collins

Spence & Partners latest blog for Pension Funds Online –

With many schemes currently receiving confirmation of a hike to their Pension Protection Fund (PPF) levy (the invoices for 2015/16, the first year where Experian risk ratings apply, have begun to arrive), the PPF has just issued their consultation document for the computation of the 2016/17 levy.

Given the substantial shift brought in for 2015/16, it is some comfort that the PPF have “chosen to keep the levy rules substantially the same for 2016/17”. In particular, the main levy calculation parameters (such as the scaling factor, the scheme-based levy multiplier and levy bands) will remain unchanged. Read more »

Laura Cumming

The Spence team has sifted through all the industry changes and trends from the last quarter, picked out the highlights and condensed it into a snappy report for you to download. Each update briefly summarises what you need to know, and clearly sets out the actions you need to take, saving you hours scouring through multiple reports, press releases, blogs and articles.

Some key updates to keep an eye out for are:

  • HMRC’s vital VAT judgment; this could see schemes recover VAT on investment management costs
  • PPF levy costs; the PPF’s recent announcement on the 2015/16 levy is fundamental to your scheme’s PPF levy cost
  • Contracting Out; make sure you are keeping in line with the HMRC’s most recent update to ensure you are ready for the abolition of contracting out.

Download your copy of the Pensions Quarterly Update report here.

If you have any questions, please don’t hesitate to get in touch with your usual contact or the Spence team.

 

Peter Scott

The Future Influencers celebrated its one year anniversary with an event in one of @Waterloo’s Alice in Wonderland inspired rooms. Although the Mad Hatter was unavailable, luckily, we had the next best thing, with Angela taking the role of chairperson. In true future influencers tradition the meeting was attended by a mix of familiar faces from prior events and several new attendees brought along by colleagues to join the discussion for the first time. As one of the first time attenders myself I can attest to the welcoming nature of the group and I look forward to coming along to many more in future. Read more »

Alan Collins

Welcome news from the PPF

Spence & Partners latest blog for Pensions Funds Online –

Last month I talked about how the Pension Protection Fund (PPF) has improved processing times and introduced expert panels from across the pensions industry to implement continuous and appropriate improvement for schemes throughout the assessment process.

Well, the PPF have been in the news again this week following the results of this year’s consultation. So what were the highlights and how will it affect the industry?

Scheme trustees and sponsoring employers will have received some comfort from the PPF’s announcement regarding the 2015/16 levy. For example, the PPF intends to collect £635m in 2015/16, around 10% less than the estimated intake for 2014/15 (invoices for which will have been issued for most schemes in the last few weeks) which will be a relief to many.

This lowered estimate filters through to the levy calculation, where the Scheme Based levy for each scheme will be more than 60% lower (all else being equal) and the Risk Based Levy (usually the significantly higher of the two) will be around 11% lower (again all else being equal).

Another welcome result comes through an easing in the PPF’s interpretation of Asset-Backed Contributions (ABCs). The latest update confirms that all forms of ABCs will count towards reducing the levy, “provided the ABC is valued in a way that reflects the value to the PPF in the event of insolvency”. Although an annual valuation of the asset is required, potentially increasing the cost of holding it, ABCs will still be a very effective PPF levy management tool for those schemes and employers which enter in to such agreements.

Further comfort should also be sought by the PPF’s confirmation that they will consult on the issues raised around mortgage ages, and how recently the secured debts were taken on by the employer. Previously this resulted in some very negative outcomes for employers who had re-mortgaged loans, but the PPF has committed to finding a solution that means this (and associated charges unlikely to affect solvency) will not unfairly increase the levy.

With these improvements there still comes a warning for schemes to keep their houses in order. Mitigating your levy is still a vital action to be taken, especially as the 31 October deadline approaches for setting next year’s levy. For small and medium-sized employers there is a risk that the recent move from D&B’s scoring system to Experian will adversely affect their score around insolvency risk measurement – so I would suggest all trustees and employers check their current score now and do whatever they can to reduce this before the deadline.

No matter your thoughts on the levy, it is here to stay. The good news is that the PPF are taking steps to accommodate the changing ways that pension schemes are run, and how and where they invest their assets. There is however still a great responsibility on trustees and employers to maintain their focus. Monitoring your levy and taking all necessary steps to reduce it where possible, many of which are simply around meeting deadlines and providing appropriate documentation, is still the best way to reduce the cost to your scheme.

Pension Funds Online

Alan Collins

We are very proud to have been a member of the specialist services panels introduced by the Pensions Protection Fund (PPF) in 2011. The average time for a scheme going through assessment then was closer to three years as opposed to the target time of two years.

Roll forward to 2014 and the average time is now 20 months, according to Sue Rivas, Deputy Director of Scheme and Member Services at the PPF.  Without a doubt the work of the panels has been a huge contributory factor in this improvement.

Several panels have subsequently been introduced which has further streamlined the process and allowed continual improvements in service to be made.

Being a member of the panel has allowed us to use the expertise that we have built up since the introduction of the PPF in 2005. Attending panel forums and pooling ideas and strategies has been a big leap forward, and key to this has been the fact that the PPF team has listened to what has been said and introduced many of the suggestions and ideas which have come out of these forums.

Communication has always been key to improving service and having designated individuals both from the panels and the PPF has allowed any issues to be dealt with immediately. Gone are the days when any issues are dealt with at the end of the process, with the inevitable delays that might arise.

There will always be room for improvement, and we will continue to look at ways to do things better because ultimately, it is the member that will benefit from the protection for their hard earned pension that the PPF can provide.

Lauren Jones

On Tuesday Last week the Future Influencers came together for our second quarterly event.

The idea behind these events, for those new to the concept, is to bring together ‘up-and-comers’ in the pensions industry and give them an opportunity to learn from various firms as well as start building their own network of professional connections. You can read about our last breakfast here.

The day started off with a chance to catch up with fellow Future Influencers, followed by four, ten minute talks presented by Future Influencers  themselves. Read more »

Alan Collins

Since the Pension Protection Fund’s doors opened in 2005, around 600 pension schemes have transferred into it, covering a membership of around 190,000. And around 90,000 pensioner members are now receiving PPF compensation.

Following the insolvency of a scheme sponsor, a scheme automatically enters the PPF and has to go through what is known as an assessment period before it is eligible to transfer. Read more »

Lauren Jones

Simon KewSimon Kew has kindly agreed to contribute the following blog for Spence & Partners’ website. Simon is the Director of Pensions at Jackal Advisory and is recognised as one of the country’s leading experts on the regulator and the scheme funding process.

RAAs

Most economic commentators are now upgrading their growth forecasts on the back of a steady flow of positive news over the last few months with increased activity in the manufacturing, construction and service sectors. Mark Carney, the Governor of the Bank of England has just announced upgrades in growth predictions from 1.4% to 1.6% for 2013 and from 2.5% to 2.8% for 2014. He considers that the recovery has finally taken hold and that the improvement has now to be sustained. Read more »

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